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Standard economic theory suggests that currency devaluation is a significant boon for export competitiveness and economic growth after a crisis. Although a direct devaluation is not available to Greece as a member of the euro area, the government in Athens should be considering other paths to that goal. Examples of such actions can be found […]

This chart shows that manufacturing has been transformed from a sector with a high labor income share into a sector in which labor accounts for less income than in the economy overall. Since 2000, labor’s share of the economy has fallen below its long term average. The chart reveals that the manufacturing sector plays an […]

The slowdown in the growth of US wages in recent years is the result of many factors. Among them is the fact that in the last 15 years, the share of labor compensation as a portion of US total income has fallen below its normal cyclical variation. Before the turn of the century, the long-run […]

Greece and the Eurogroup have struck a deal designed to avoid another economic meltdown and even return Greece to economic growth. An additional four months have been added to an earlier two-month extension of the review of Greece’s economic reform program, giving Athens and its partners until the end of June to reach a more […]

The melodrama in Greece has produced demands that Athens and its European partners take decisive action to fix a complicated situation once and for all. In fact, kicking the can down the road—as the players did recently to avert a financial crisis—is an underrated and long-standing feature of debtor-creditor relations. The rattling metallic noise produced […]

Greece’s last-minute agreement with the Eurogroup on Febuary 20 averted a potential major financial disaster. The Greek government was days from running out of money to pay the bills. But despite the claims of victory by both Prime Minister Alexis Tsipras and his European creditors, little has changed in the relationship among Europe, the International […]

Now that over 75 percent of Greece’s debt has been transferred from private banks to the official sector backed by European taxpayers—there is a novel solution to the Greek tragedy that would satisfy the interests of borrowers as well as creditors. This solution could also temper unhelpful nationalism on both sides and doesn’t promote future […]

The new Greek government has floated the idea of swapping the official Greek debt that is now held by EU countries and the European Stability Mechanism (ESM) with GDP-indexed bonds. The proposal has received support from some in the economics profession in various forums, for example here. But if precedent is any guide, the idea […]

Less than a month after taking power, the Greek government led by Syriza finds itself in a difficult place. This is due to the grand miscalculation of its leaders that Europe will blink in front of the victory that its leader, Alexis Tsipras, achieved in last month’s elections. Quite the opposite: So far Europe has […]

Greece’s descent into its difficulties is narrated and visualized through six charts. They focus on the severity of the economic downturn, reduced government spending, the increase in public debt and how Greek debt has changed hands from the private sector to European taxpayers.